9 ms·
You need to need to subtract inflation, otherwise your real increase is negative
by tw98521358 4y ago
You need to need to subtract inflation, otherwise your real increase is negative
- gruez 4y agoright, but is there any reason to believe that 7% inflation is going to continue well into the future? The markets certainly don't think so. They're currently pricing in a 2.33% inflation rate over the next 5 years, measured by the spread between inflation protected treasuries and non-inflation protected treasuries. [1] https://fred.stlouisfed.org/series/T5YIE https://fred.stlouisfed.org/series/T5YIE
- tw98521358 4y ago2.3 is too low. This seems to be based on treasury yields that yield negative real return right now. In order to have v 2.3 you basically need to have 0 for the next 4 years if you average the previous year in.